Sony Ericsson swings to 4Q loss

[January 16, 2009]  STOCKHOLM, Sweden (AP) -- Mobile phone maker Sony Ericsson on Friday said it swung to a net loss in the fourth quarter, mainly pressured by lower volumes on the back of the financial crisis.

The Sony Corp. and LM Ericsson AB joint venture reported a net loss of euro187 million ($245 million), in the October to December period, compared with a year-earlier profit of euro373 million.

It also reported a loss for the full year 2008 of euro73 million, compared with profit of euro1.1 billion a year earlier.

Sales in the quarter came to euro2.9 billion, down 23 percent from euro3.8 billion in the same period in 2007.

The company said its euro300 million ($395 million) cost savings plan is running "on track," but that it plans to increase the saving by shaving an extra euro180 million off its operating costs. The full effect of that addition is expected by the end of this year, it said, without disclosing details on how those extra savings would be achieved.

Company President Hideki Komiyama described 2008 as a "tumultuous year," saying the fourth quarter had been a challenging period.

"We foresee a continued deterioration in the marketplace in 2009, particularly in the first half," he said in a statement.

The company said it expects the global handset market to contract as well as a continued fall of the average selling prices of handsets.

It said its estimate of the global handset market in 2008 had been revised to 1.19 billion units -- 6 percent growth. It had previously estimated growth of 10 percent.

Sony Ericsson shipped 24.2 million units in the fourth quarter, which was a 21 percent drop from the fourth quarter last year.

[Associated Press; By LOUISE NORDSTROM]

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